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Are Whisper Forecasts More Informative than Consensus Analysts’ Forecasts?

In: Advances In Quantitative Analysis Of Finance And Accounting

Author

Listed:
  • Erik Devos

    (Department of Finance, College of Business, 234 Copeland Hall, Ohio University, Athens, Ohio 45701, USA)

  • Yiuman Tse

    (Department of Finance, College of BusinessUniversity of Texas at San Antonio, 501West Durango Blvd., San Antonio, Texas 78207, USA)

Abstract

In this paper, we compare whisper forecasts with consensus forecasts of quarterly earnings. Analysts’ private whisper forecasts are optimistic, whereas their public consensus forecasts are pessimistic. We find that whispers are more accurate for high-tech and high-growth firms. The introduction of Regulation FD does not alter these findings. In a multivariate setting, we find that the whisper and consensus forecast errors are related to the abnormal returns around the earnings announcement, suggesting that whisper and consensus forecasts are value-relevant.

Suggested Citation

  • Erik Devos & Yiuman Tse, 2007. "Are Whisper Forecasts More Informative than Consensus Analysts’ Forecasts?," World Scientific Book Chapters, in: Cheng-Few Lee (ed.), Advances In Quantitative Analysis Of Finance And Accounting, chapter 6, pages 113-140, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789812772213_0006
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